People who personally do work for other people can broadly be categorised as either a worker or self-employed. Worker status includes employees, but not all workers are necessarily employees.
Many employment rights, like the Working Time Regulations and entitlement to the National Minimum Wage, apply to all workers, but the rights to be protected from unfair dismissal and to redundancy pay only apply to employees.
If someone is not an employee they will either be genuinely self-employed, which means they run a business or profession offering their services to different clients or customers, or they will be a worker.
The Employment Rights Act 1996 contains the following definitions:
(1) “employee” means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.
(2) “contract of employment” means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.
(3) “worker” (except in the phrases “shop worker” and “betting worker”) means an individual who has entered into or works under (or, where the employment has ceased, worked under) —
(a) a contract of employment, or
(b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual;
and any reference to a worker’s contract shall be construed accordingly.
(4) “employer”, in relation to an employee or a worker, means the person by whom the employee or worker is (or, where the employment has ceased, was) employed.
Worker status and the ‘gig economy’
The “gig economy” business model, where service providers rely on people they regard as self-employed contractors to carry out work for them, has been challenged by a number of high profile employment tribunal claims.
The GMB union brought a test case against Uber, where private hire drivers provide their services through the Uber smartphone app, arguing that the drivers were not self-employed, but workers entitled to workers’ rights including holiday pay, a guaranteed minimum wage and an entitlement to breaks.
In a judgment on 19 February 2021, the Supreme Court unanimously dismissed an appeal by Uber against a previous ruling in the claimants’ favour.
The union says it will “now consult with Uber driver members over their forthcoming compensation claim at the Employment Appeal Tribunal”.
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Last Updated on March 2, 2021 by Admin